Colombia’s Ecopetrol Says Exports To U.S. Up On Venezuela, Higher Output

(Reuters,
22.May.2019) — Colombia’s state-run oil company Ecopetrol said on Wednesday its
crude exports to the United States rose nearly 25% in the first quarter because
of lower supply from neighboring Venezuela and higher production.

The
4-week average for crude imports from Colombia have surged to near the highest
levels in a year at about 431,000 barrels per day, according to U.S. government
data. Colombia is among the top 10 suppliers of crude to the United States.

Sales
to the U.S. increased to 195,600 barrels per day (bpd) from 157,100 bpd in the
first quarter of last year, Ecopetrol said in a statement.

“The
main reasons for the good performance of crude oil exports to the United States
were the use of sales opportunities in the face of lower supply from other
countries, including Venezuela, as well as greater availability of crude oil
for sale due to the increase in production,” the company said.

About
12.3 million barrels of Colombian crude arrived in the United States in April,
according to Refinitiv Eikon data, the highest since February 2016. Arrivals in
May are on track to be about 9.4 million barrels.

A
majority of April cargoes were Colombia’s medium sour Vasconia grade. Several
cargoes of Colombia’s heavy Castilla Blend were also shipped.

Charterers
in April included U.S. refiners PBF Energy, Marathon Petroleum and Valero, the
Refinitiv Eikon data showed.

Flows
in May are also likely to be higher as Canadian crude, a steady part of some of
the biggest U.S. refiners’ diet, has strengthened in the Gulf Coast, traders
said, trading as strong as $3 per barrel above benchmark futures for May.

Venezuela’s
output is at a near seven-decade low due to years of mismanagement and
under-investment, and production declines have accelerated in recent months
following U.S. sanctions.

The
drop in Venezuelan shipments has worsened a global drought of the heavy crude
that U.S. Gulf Coast refineries prefer, spurring a hunt for similar grades.

Ecopetrol
said earlier this month its first-quarter net profit increased 5% to around
$847 million on the back of output and sales upticks and greater operating
efficiencies.

The
company has said it will invest between $3.5 billion and $4 billion in 2019,
more than in 2018, as part of an ambitious plan to boost production and
exploration to replenish dwindling reserves.